Over the years, Hollywood has comically mined the hidden costs that accompany home building and renovation, from 1948's Mr. Blandings Builds His Dream House to 1986's The Money Pit. Dream homes don't have to become nightmares, however. With some basic knowledge about what to look for when buying a house (especially when renovating), many pitfalls can be avoided.
Contractor Nick Castjohn, owner of Kenner-based Renovate Inc., second vice president of the Louisiana Home Builders Association and a member of the Residential Committee of the Louisiana State Licensing Board for Contractors, recommends potential buyers follow these steps before purchasing a home:
Have the house inspected professionally
A home inspection is a standard course of action when considering buying any house. A professional home inspector investigates a checklist of basics from making sure appliances function properly to determining whether a house is subsiding and needs to be leveled. The inspector also looks for cracks, rotting wood, roof and water leaks and inspects attic spaces and underneath the house if the foundation is raised.
A basic home inspection, however, doesn't reveal what's going on inside walls or slabs, Castjohn says, nor does it determine the cause of a defect. The advantage of having a home inspected is that the seller is responsible for existing flaws noted in the inspection report. If there is no inspection, the purchaser could be stuck with repair or replacement costs.
Buyers purchasing a newly constructed home should note that the builder is responsible for following applicable building codes and is accountable to code enforcement officials throughout the building process.
Get a termite inspection
A pest control professional can conduct the inspection, which includes searching for termite trails and may detect evidence of old termite damage. Castjohn says some inspectors rarely investigate inside the walls, where termite damage or live termites may be present.
Have a video inspection of underground pipes
This type of inspection isn't yet the norm among prospective home buyers, Castjohn says, but "it's a relatively cheap insurance" against plumbing problems that could prove costly later. A plumber inserts a video camera into underground sewerage pipes and inspects them thoroughly to make sure there are no breaks, cracks or leaks.
Know when you need help
Do-it-yourselfers don't have to hire a contractor to renovate their own home. But if help is hired, a homeowner must use a registered contractor for projects costing $7,500-$75,000. A licensed contractor is required for jobs costing more than $75,000.
Castjohn suggests homebuyers consider the following features when buying a home or determining whether renovations and upgrades are worth the money:
Floors — You may be able to refurbish wood floors instead of replacing them, depending on their age and condition. A sign that floors are not salvageable: "When you start to see nails, you may have to look at replacing floors — and that can get expensive," Castjohn says.
Windows — Look for rotting wood around window sills and check for condensation inside panes of glass in insulated windows, which indicates the weather seal is broken. Castjohn says, "Windows that aren't energy efficient are a huge source of heating and cooling loss."
Subsidence — In New Orleans, subsidence (or the ground sinking) is a common problem. To determine whether a house needs to be leveled, a home inspector, contractor or leveling company will look for cracks in key places such as walls above doors and windows. Doors and windows that won't open or close are another sign of settling.
HVAC System — The heating, ventilation and air-conditioning system is important not only to a family's budget but also its comfort. Castjohn advises researching the age of the system that comes with the house and making sure the HVAC unit is the proper size for the space. Under- and oversized units can affect energy efficiency and make it difficult to control dampness and maintain air quality in the house.
Insulation — Have an inspector make sure that insulation in attics and underneath houses is doing its job. Many older homes don't have insulation and function without it. In newer homes, however, the insulation must be considered when determining the proper size of HVAC system needed to avoid moisture problems.
Moisture — Finding the source of a leak is a priority, Castjohn says, especially when signs of moisture are evident (watch out for water stains that have been painted over). Mold is common, but there shouldn't be more inside the house than outside. If there is an area of mold growth larger than 6 square feet, Louisiana law mandates a licensed mold remediator be used.
Gas — Homes with gas should have a carbon monoxide detector to warn residents of leaks, which can be deadly.
Plumbing — Check the plumbing fixtures throughout the house to make sure they work easily and don't leak. Also investigate the type of pipes used in the house. If the pipes are galvanized (common in homes built before the 1960s), Castjohn recommends you have them replaced. Galvanized pipes no longer are installed in homes because they are susceptible to corrosion and can release lead into the water that passes through the pipes.
Above all, Castjohn says, know what you are getting into when it comes to buying and/or renovating a house. Consult a contractor who is licensed and insured so all improvements will made in accordance with current building requirements. "If you are going to do a substantial renovation that costs (materials and labor) 50 percent of the appraised value of the house [materials and labor], the entire structure has to be brought to code."
Three local realtors/renovators offer their top renovating advice
When looking for a house to renovate, Realtor Ricky Lemann of Keller Williams Realty says to choose one with good bones that's in fairly good condition.
"In order to procure a house at a good price, I look for what they call 'the right things wrong,'" says Lemann, who has completed eight renovations. Cosmetic things like outdated countertops, carpeting, appliances, paint colors and landscaping can be changed easily and can make a huge difference in the outcome for the investment, he says. Making cosmetic improvements rather than taking on major mechanical overhauls in plumbing and wiring, for example, has multiple advantages for first-time renovators: It doesn't require gutting the property, it doesn't require a lot of cash at once and homeowners can live in the house during renovations.
"You don't have to do it all at once," Lemann says. "You can get your foot in the door and chip away at it bit by bit."
"If you're doing it for yourself (to occupy) for five years or more, do what you want," says Latter & Blum Realtor John Schaff, whose renovation specialty is condo conversions.
For those renovating in order to sell a property, he advises working with a professional Realtor who knows which amenities buyers are seeking. "Research design trends and make sure it appeals to the masses," he says.
"Make sure the historical features of the house are still intact," says Michael Zarou, a Realtor with Latter & Blum, who has renovated multiple historic properties. "You can recreate those features, but it's more expensive."
If you're renovating for yourself, design decisions can be based on personal taste, he says, but if you're renovating a house to flip it, original architectural features are a major selling point.